The Shrinking Pie

Our company has several brands in the personal care, packaged food and other FMCG range of
products. We have a shampoo brand that has around 5% market share consistently in the
given markets. We launched a brand of hair conditioners in Jan 2017. From 2018, it has been
available in the market in 2 SKUs of bottles and 1 SKU of sachet. The brand did very well in the
first two years after launch and garnered a market share of above 8% by Jan 2019. However,
there has been bad news in the year 2019 – while the market of hair conditioner has grown,
our brand has not been doing that well. We had been getting an idea of that from our internal
data sources. The findings from the marketing intelligence data that we procure, substantiated
that.

The following data (Table 1) from Consumer brand tracking [among hair conditioner users] and
Consumer Panel [among large sample of households] shows good news – penetration of hair
conditioners, as a product category, has increased in 2019 and our brand has also entered
significant number of new households. Top of Mind (TOM) Awareness of our brand has also
shown an increasing trend, indicating good salience of our brand.

TABLE 1 (Market: Urban Karnataka, Goa, TN)

  CONSUMER TRACK CONSUMER PANEL

Year TOM Awareness Category Penetration Ever Tried – Brand X
2019 Brand X (Hair Conditioner) [Among hair conditioner users]
  % % %
       
Jan 7.0 20.0 32
Feb 8.0 20.5 32.2
Mar 6.5 20.7 32.2
Apr 7.5 20.9 32.3
May 7.0 21.2 32.5
Jun 8.0 21.4 32.5
Jul 9.0 21.5 32.6
Aug 10.0 23.1 35.6
Sep 11.0 24.8 38.8
Oct 11.0 26.2 41.9
Nov 10.6 27.5 43.5
Dec 10.8 28.7 44.6
TOM Awareness: The first brand that is recalled by target consumers when asked about the product category

Category Penetration: % of households, in the given market, that have “Ever Used” any hair conditioner

Ever Tried – Brand X: % of households, among hair conditioner users, who have ever bought Brand X, at least once
The following data from Retail Audit (Table 2) showed the real picture and painted a sad story
for us. Our brand’s market share has been dwindling in a scenario where hair conditioner, as a
product category, has been growing.

So what has been happening in the market actually? Where did we go wrong? What do we
need to do now?

TABLE 2 (Market: Urban Karnataka, Goa, TN)

  RETAIL AUDIT
Mkt Size – Hair Mkt Share Numeric Weighted
Year Conditioner (by Vol) Offtake Dist Dist PDO SAH
(in '000
2019 (in '000 litres) Brand X litres) Brand X Brand X (in litres) Brand X
    Category % Brand X % % Brand X %
               
Jan 4805 8.10 389 48.10 58.60 12.64 16.0
Feb 4854 8.00 388 49.33 58.20 12.30 15.8
Mar 4833 8.00 387 50.55 58.60 11.95 15.9
Apr 4896 7.80 382 54.25 58.10 11.00 16.1
May 4910 7.90 388 57.72 57.40 10.50 16.3
Jun 4895 7.20 352 55.63 56.40 9.90 16.7
Jul 4925 7.00 345 58.55 56.30 9.20 16.9
Aug 5008 6.40 321 56.91 56.10 8.80 17.2
Sep 5165 6.00 310 58.34 55.60 8.30 17.9
Oct 5250 5.50 289 59.36 55.40 7.60 18.2
Nov 5326 5.30 282 63.01 55.00 7.00 19.0
Dec 5390 5.20 280 67.38 54.50 6.50 20.0
Mkt Size – Hair Conditioners: Gives the Volume Sales of the product category in ‘000 liters
Mkt Share: Gives the Mkt Share of our brand by Volume
Offtake: The consumer buying, as estimated by the Retail Audit, for our brand in ‘000 litres
Numeric Dist: % of shops where our brand is present, among all shops that stock hair conditioners
Weighted Dist: % of shops where our brand is present, among all shops that stock hair conditioners, weighted by
the category sales of hair conditioners in the shops
PDO (Per Dealer Offtake): Volume of our brand sold in the shops where we are stocked
SAH (Share Among Handlers): Market Share of our brand, among shops where our brand is stocked